Paramount Fills Spielberg Void with Marvel Superheroes

Viacom's Paramount Pictures studio signed a deal Monday with Marvel Entertainment's Marvel Studios to distribute its next five films worldwide. Marvel Studios to distribute its next five films worldwide. This deal builds on Paramount's successful distribution of Marvel's "Iron Man," whose opening weekend broke records, the film grossing $574 million worldwide. This new deal, which includes Iron Man 2 and 3 as well as "Captain America" and "The Avengers", comes at a crucial time for Paramount, filling a crucial hole in their distribution

This deal comes as a crucial time -- Steven Spielberg, whose DreamWorks studio is owned by Paramount, and has been distributing six films a year through Paramount, is leaving. Spielberg recently secured $1.2 billion in financing, with a $500 million equity investment from India's Reliance ADA group. Paramount isn't losing all of Spielberg's projects; some like Transformers 2 are joint-ventures with Paramount and will be distributed by the sudio. But for the most part Spielberg's exit leaves Paramount with a six picture hole in its distribution schedule, a hole that pretty much must be filled because all the infrastructre is already there.

Marvel's films are good way to fill part of that hole: Paramount gets a distribution fee, and doesn't have to put up money up-front to pay for the films. The movies are based on established comic book characters with a built-in audience, and so far, Marvel has a pretty strong track record. And the movie industry in general is typically counter cyclical in weak economic markets, so Marvel, which has zero exposure to advertising markets, should be pretty well positioned.